VARDHAMAN GEM EXPORTS PVT. LTD.,MUMBAI vs. THE ITO, WARD 5(3)(1), MUMBAI, MUMBAI

Brief Facts are such that the Assessing Officer completed the reassessments for both the assessment years under section 143(3) read with section 147 of the Act by separate orders dated 21.03.2023. In the assessment year 2013-14, an addition of Rs.20,76,17,499/- was made under section 68 read with section 115BBE of the Act. In the assessment year 2014-15, the corresponding addition was Rs.8,89,55,823/-.

The first appellate orders passed by the learned CIT(A)-48, Mumbai, on 17.10.2024 were set aside by the Tribunal vide order dated 13.06.2025 in ITA No.6556/Mum/2024 for the assessment year 2013-14 and ITA No.6551/Mum/2024 for the assessment year 2014-15. The matters were restored to the learned CIT(A) for fresh adjudication after affording reasonable opportunity of hearing to the assessee. In the second round, the learned CIT(A), by the impugned orders dated 26.02.2026, again confirmed the action of the Assessing Officer. The assessee is, therefore, in further appeal before us.

The grounds raised by the assessee for the assessment year 2013-14 are reproduced as under: 1. The Ld. AO has erred in issuing the notice u/s 148 of the Act and Ld. CIT(A) has erred in confirming the same. 2. The Ld. AO has erred in issuing notice u/s 148 of the Act on 29.06.2021 (which was treated notice u/s 148A of the Act as per order dated 04.05.2022 rendered by the Hon’ble Supreme Court in the case of Ashish Agarwal) with the permission of PCIT (Central), Mumbai-1, whereas as per amended section (from 01.04.2021) 151 of the permission of Pr. CCIT, Pr. DGIT, CCIT of DGIT is required if the reopening of the case is after 3 years, Hence notice u/s 148A is invalid.

The learned AR submitted that the relevant information and material were supplied to the assessee along with the communication dated 25.05.2022. The assessee did not furnish a reply. Therefore, after excluding the period during which the deemed notices remained stayed and the further period of two weeks allowed to the assessee, only the balance period surviving as on the date of the original notices was available to the Assessing Officer for completing the proceedings contemplated under section 148A and issuing the fresh notices under section 148.

The learned AR relied upon the decision of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) / [2024] 469 ITR 46 (SC), and submitted that the notices issued under section 148 on 29.07.2022 were beyond the surviving period of limitation. It was accordingly contended that the fresh notices, the resultant reassessment proceedings and the assessment orders dated 21.03.2023 were without jurisdiction and liable to be quashed.

The learned Departmental Representative, on the other hand, relied upon the assessment orders and the impugned orders passed by the learned CIT(A).

We have considered the rival submissions and carefully perused the material placed on record. The controversy before us is confined to whether the fresh notices issued under section 148 on 29.07.2022 were within the period of limitation computed in accordance with the decision of the Hon’ble Supreme Court in Rajeev Bansal.

The material dates emerging from the departmental documents placed in the paper books are as follows: Particulars Assessment Assessment Year 2013-14 Year 2014-15 Original notice under section 148, 29.06.2021 29.06.2021 subsequently deemed to be notice under section 148A(b) Paper-book page 5 5 Supply of relevant information and 25.05.2022 25.05.2022 material Two-week response period expired 08.06.2022 08.06.2022 Order under section 148A(d) 28.07.2022 27.07.2022 Fresh notice under section 148 29.07.2022 29.07.2022 Paper-book page of fresh notice 6 6 Paper-book pages of order under 7 to 9 7 to 9 section 148A(d)

In respect of the assessment year 2014-15, the copy of the order under section 148A(d) placed at pages 7 to 9 of the paper book bears the date 27.07.2022, whereas the assessment order narrates that the order under section 148A(d) was passed on 28.07.2022. This discrepancy of one day is immaterial because, on either date,

In Rajeev Bansal, the Hon’ble Supreme Court explained that the notices issued under the old regime between 01.04.2021 and 30.06.2021, which were deemed to be notices under section 148A(b), retained the balance period available between the date of the original notice and 30.06.2021. The period from the date of the deemed notice until the supply of relevant information and material was required to be excluded. The further period of two weeks granted to the assessee for furnishing a reply was also required to be excluded. Upon expiry of the excluded period, the Assessing Officer was required to consider the reply, pass an order under section 148A(d) and issue a notice under section 148 within the surviving period.

Paragraph 112 of the judgment illustrates the computation by treating the period from 01.05.2021 to 30.06.2021 as sixty-one days. Applying the same inclusive method, the period surviving where the original notice was issued on 29.06.2021 would be two days, comprising 29.06.2021 and 30.06.2021.

The relevant information and material were admittedly supplied to the assessee on 25.05.2022. Two weeks allowed for furnishing the reply expired on 08.06.2022. Since no reply was filed, the clock of limitation resumed on 09.06.2022. The normal surviving period of two days consequently expired on 10.06.2022.

Even if the Revenue is given the benefit of the fourth proviso to section 149 and the remaining period is enlarged to seven days, the outer limit would expire on 15.06.2022. The orders under section 148A(d), passed on 27.07.2022 or 28.07.2022, and the

The synopsis filed by the assessee also contains an alternative computation which proceeds on an assumption more favourable to the Revenue, namely, that the period available for supplying the relevant information and material continued until 02.06.2022, being the thirty-day period contemplated in Union of India v. Ashish Agarwal. The alternative computation, after applying the inclusive method explained in paragraph 112 of Rajeev Bansal, may be set out as under: Particulars Relevant date/period Date of original notice, subsequently treated as 29.06.2021 notice under section 148A(b) Extended terminal date under TOLA 30.06.2021 Surviving period between 29.06.2021 and Two days 30.06.2021 Assumed outer date for supplying relevant 02.06.2022 information and material Two-week period available to the assessee for 03.06.2022 to furnishing a reply 16.06.2022 Date on which the clock of limitation would resume 17.06.2022 Normal outer date after allowing the surviving 18.06.2022 period of two days Outer date after granting seven days under the 23.06.2022 fourth proviso to section 149 Actual date of notices issued under section 148 29.07.2022 Result Barred by limitation

Thus, even by adopting the alternative computation most favourable to the Revenue and by granting the benefit of seven days under the fourth proviso to section 149, the limitation could not

In paragraph 113 of Rajeev Bansal, the Hon’ble Supreme Court held that compliance with the limitation prescribed under section 149 is a jurisdictional precondition. The operative conclusion in paragraph 114(h) reads: “All notices issued beyond the surviving period are time barred and liable to be set aside.” 20. The aforesaid declaration of law squarely governs the present appeals. The Assessing Officer had no jurisdiction to issue the fresh notices under section 148 on 29.07.2022 after expiry of the surviving period. The fact that the alleged escaped income exceeded Rs.50,00,000/- or was stated to be represented by deposits in a bank account may satisfy the monetary or asset-related conditions under section 149(1)(b), but it cannot extend the surviving period of limitation determined in accordance with Rajeev Bansal. Limitation constitutes an independent and mandatory jurisdictional requirement.

The learned CIT(A) did not examine the validity of the fresh notices in the light of the law subsequently declared by the Hon’ble Supreme Court in Rajeev Bansal. Reliance upon the existence of information suggesting escapement of income cannot cure a notice issued beyond the statutory period. Jurisdiction must exist before the merits of the alleged escapement can be examined.

We, therefore, hold that the notices issued under section 148 on 29.07.2022 for both the assessment years were barred by limitation. Consequently, the orders passed under section 148A(d),

Ground no.1 in each appeal is accordingly allowed. In view of our decision on the foundational jurisdictional issue, the remaining grounds concerning the validity of sanction, absence of DIN, applicability of the asset condition, additions on merits and denial of cross-examination have become academic and do not require separate adjudication.

In the result, both the appeals filed by the assessee are allowed.